FMN vs SPY
Federated Hermes Premier Municipal Income Fund vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. SPY delivered stronger 1-year returns. SPY offers more diversification with 503 holdings.
Side-by-Side Comparison
| Metric | FMN | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.75% | 0.09% | |
| AUM | $16M | $789.1B | |
| Dividend Yield | 4.29% | 1.01% | |
| Holdings | 150 | 505 | |
| YTD Return | +3.14% | +13.75% | |
| 1Y Return | +8.79% | +22.91% | |
| 3Y Return (annualized) | +6.65% | +21.67% | |
| 5Y Return (annualized) | -2.48% | +13.32% | |
| Volatility (annualized) | 14.7% | 15.3% | |
| Max Drawdown | -53.4% | -56.5% | |
| Fund Family | Federated Hermes | State Street Investment Management | |
| Category | Tax Preferred | Equity | |
| Inception | Dec 20, 2002 | Jan 22, 1993 |
FMN vs SPY Performance
Federated Hermes Premier Municipal Income Fund (FMN) is a ETF from Federated Hermes and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year FMN returned +8.79% while SPY returned +22.91%. Year to date, FMN is up 3.14% versus a gain of 13.75% for SPY.
Over three years, FMN compounded at +6.65% per year against +21.67% for SPY; over five years the annualized figures are -2.48% and +13.32% respectively. Across the full 24-year window we track, SPY has the edge at +8.85% annualized vs -0.22%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SPY has been the more volatile fund, with annualized monthly volatility of 15.3% compared with 14.7% for FMN. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -53.4% for FMN and -56.5% for SPY. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.32. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FMN charges 0.75% per year while SPY charges 0.09%. On a $10,000 position that is $75 vs $9 annually, a gap of $66 per year that compounds over a long holding period. On income, FMN currently yields 4.29% against 1.01% for SPY.
Holdings Overlap
FMN and SPY share 0 holdings out of 588 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FMN or SPY?
FMN has an expense ratio of 0.75% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $66 per year of difference.
Which performed better, FMN or SPY?
Over the past year FMN returned +8.79% vs +22.91% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (24 years), FMN annualized -0.22% vs +8.85% for SPY. Past performance does not guarantee future results.
Which is riskier, FMN or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 14.7% for FMN. Worst drawdown: FMN -53.4% vs SPY -56.5%.
Should I hold both FMN and SPY?
FMN and SPY have a monthly-return correlation of 0.32, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FMN and SPY?
FMN and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 588 unique securities.
Which pays a higher dividend, FMN or SPY?
FMN yields 4.29% while SPY yields 1.01%, so FMN currently pays the higher dividend yield.
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